From the official Windows Live Sync blog, regarding the Windows Live Sync mandatory update:
If your computer was already running Windows 7 before this update, you’ll have to go to the Sync website to add your computer back to all the folders you’re syncing. We know this is a hassle and we apologize for this inconvenience. You’ll also see that your computer shows up on the Sync website with a new name—you can safely go ahead and delete the old computer from the website. Rest assured that your files and folders are safe.
Source: Windows Live Sync outage and client update - Windows Live
